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Oil prices drop as OPEC+ boosts output

Crude oil prices fell significantly at the start of this week, reaching the lowest level since 2021 after OPEC+ announced an unexpected production increase. Stock prices on Wall Street rose on optimism about trade talks between the US and China. In the euro area, investor confidence improved significantly in May, according to German institute Sentix, surpassing expectations. Investors’ focus will now turn to the Federal Reserve’s next interest rate decision on Wednesday. 

  • Date
  • Author Alessandro Fezzi, LGT Research Content & Publications
  • Reading time 5 minutes

Oil
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Oil prices fell significantly on Monday after OPEC+ announced an unexpected production increase. Brent oil futures for June decreased by 3.6% to USD 59.10 per barrel, while West Texas Intermediate crude futures dropped by 3.7% to USD 55.68 per barrel. The Organisation of Petroleum Exporting Countries and its allies (OPEC+) agreed to raise output by 411,000 barrels per day from June, heightening concerns of a supply glut amid weakening demand. This move follows a broader trend of declining oil prices in 2025, exacerbated by global economic uncertainties and ongoing trade tensions between the US and China.

Asian stocks rise amid trade talks

Asia-Pacific markets mostly increased on Tuesday as investors monitored trade developments between the US and regional countries. India's proposal for zero tariffs on certain goods and Malaysia's announcement of ongoing tariff discussions with the US boosted sentiment. China's CSI 300 index rose 0.95% and Hong Kong's Hang Seng Index gained 0.67%, while India's Nifty 50 fell 0.15%. Meanwhile, the US dollar strengthened against Asian currencies, reversing recent declines.

US equity indices dip amid tariff concerns - Trump imposes 100% tariff on foreign films

US stock markets started the week with slight declines after a strong previous week, as concerns over new tariffs on foreign-produced films weighed on media and streaming stocks. The Dow Jones Industrial Average fell 0.2% to 41,218.83 points on Monday, while the S&P 500 dropped 0.6% to 5650.38 points and the Nasdaq 100 declined 0.7% to 19,967.94 points. President Donald Trump announced plans to impose a 100% tariff on foreign films, impacting stocks like Netflix and Walt Disney. Tariffs will be implemented immediately, the Department of Commerce confirmed. Additionally, Warren Buffet announced his retirement from Berkshire Hathaway, leading to a 5.1% drop in its B shares. In economic news, the US ISM non-manufacturing PMI came in stronger than expected at 51.6 vs. 50.4 estimated.

Eurozone investor sentiment rebounds in May

Investor confidence in the euro area improved significantly in May, with the Sentix index rising to minus 8.1 from minus 19.5 in April, surpassing expectations. The index's current situation component increased to minus 19.3, the highest since August 2024, while expectations surged by 19.6 points to 3.8. The recovery follows the EU's measured response to tariffs imposed by US President Trump, which had previously dampened sentiment.

European stocks steady 

European stock markets saw little movement on Monday, with the EuroStoxx 50 edging down minimally and the SMI in Zurich falling 0.2%. London markets were closed for a holiday. Shell is considering acquiring BP, valued at nearly EUR 66 billion, potentially creating significant cost synergies, particularly in the Gulf of Mexico. BP shares rose 2.8% in US trading, while Shell fell 1.7%. Additionally, Erste Group's EUR 7 billion investment in Santander’s Polish subsidiary boosted Erste Group shares by 8.7% in Vienna.

Swiss inflation drops to 0% in April

Swiss inflation fell sharply to 0% in April, down from 0.3% in March, according to data released by the Federal Statistical Office on Monday. The unexpected drop raises the likelihood of another interest rate cut by the Swiss National Bank. Prices for domestic goods rose by 0.8% year-on-year, while imported goods fell by 2.5%. Experts attribute the decline to lower oil prices and a stronger Swiss franc, with many predicting that inflation could turn negative in the coming months.

Corporate and economic calendar

Corporate news in focus: Quarterly figures from Geberit, Vestas Wind Systems, Gen Digital, Advanced Micro Devices (AMD), Electronic Arts, Ferrari NV, Intesa Sanpaolo und Zalando.

Economic data in focus: UK retail sales (01:01), euro-area Producer Price Index (11:00), US trade balance (14:30), Canadian trade balance (14:30).

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.